Gold price surges on Middle East, Russia tensions

OREANDA-NEWS. The price of gold shot to an 11-week high on Wednesday as escalating geopolitical risks saw investors seeking safe haven assets.

Gold reached its highest point since January 25 after the most active gold futures contract on the Comex market in New York jumped 2% from its opening levels to reach $1,369.40 an ounce.

Wednesday saw some of the most heavy trading of the year with the equivalent of more than 40m ounces of June contracts already traded by midday compared to a daily average of around 25m ounces. The price of gold is up $82 an ounce in 2018.

Holdings in physically backed gold exchange-traded funds tracked by Bloomberg extended their ascent to the highest since 2013, rising for a fourth straight session on Tuesday in the longest run since January. Gold ETFS hold around 74m ounces of bullion currently.

The news from Saudi Arabia sent crude oil to a three year high above $67 a barrel while metals markets were also in turmoil.

Palladium, which has also benefited from expectations that sanctions on Russia which together with South Africa responsible for more than 70% of global production, could hurt supply, rising to $960 an ounce, up nearly 7% since Monday.

Aluminium prices extended their rally to a sixth straight session amid persistent worry about shortages after the US imposed sanctions on Russia’s Rusal.

The metal advanced as much as 3.5% on Wednesday to $2,277 a tonne on the London Metal Exchange. That was just $13 away from the peak in December when it touched the highest since March 2012.